Chapter 23, Problem 1SPA

(a)

To determine

Calculate the growth rate of real GDP.

Explanation of Solution

Growth rate of Real GDP can be calculated by using the following formula.

$\text{Growth rate of real GDP=}\left(\frac{{\text{Real GDP}}_{2014}-{\text{Real GDP}}_{2013}}{{\text{Real GDP}}_{2013}}\right)\times 100$        (1)

The growth rate of Real GDP can be calculated by substituting the respective values in equation (1) as follows.

$\begin{array}{c}\text{Growth rate of real GDP=}\left(\frac{1,202-1,180}{1,180}\right)\times 100\\ =\left(\frac{22}{1,180}\right)\times 100\\ =0.0166\\ =1.86\end{array}$

Thus, the growth rate of real GDP is 1.86 percent

(b)

To determine

Estimate the growth rate of real GDP per person.

Explanation of Solution

The growth rate of real GDP per person in Brazil can be calculated by using the following formula.

$\text{Population growth rate}=\left(\frac{{\text{Population}}_{2014}-{\text{Population}}_{2013}}{{\text{Population}}_{2013}}\right)\times 100$        (2)

The growth rate of real GDP per person can be calculated by substituting the respective values in equation (2).

$\begin{array}{c}\text{Population growth rate}=\frac{200-198}{198}\times 100\\ =1.01\end{array}$

Thus, the population growth rate in Brazil is 1.01 percent.

Growth rate of real GDP per person can be calculated as follows.

$\begin{array}{c}\text{Growth rate of real GDP per person}=\text{Growth rate of real GDP}-\text{Population growth rate}\\ =1.86-1.01\\ =0.85\end{array}$

Thus, the growth rate of real GDP per person is 0.85 percent.

(c)

To determine

Estimate the approximate number of years to double the real GDP.

Explanation of Solution

$\begin{array}{c}\text{Number of years to double=}\frac{\text{70}}{\text{Real GDP per person}}\\ =\frac{70}{0.85}\\ =82.35\end{array}$

Thus, Brazil will take 82.35 years to double its real GDP person.